1) The Need for a Localised Urban Agenda

GS 3: Economy: Addressing diverse urban needs

Context

• India is experiencing rapid urbanisation and is expected to have the world’s largest urban population in the coming decades. However, urban development planning remains disconnected from the realities of local communities. Centralised schemes and policies often dictate the future of cities without adequately considering region-specific needs.

India’s Urban Journey

• The urbanisation process accelerated after the 1990s with economic liberalisation. The Union government has played a significant role in shaping the urban landscape through various schemes, from the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to recent flagship programmes.
• While these initiatives have influenced urban growth, they have often followed a top-down approach that limits local adaptability.

The Centre’s Role in Urban Development

• Despite urban development being a State subject, the Centre has actively implemented housing and welfare schemes such as Indira Awas Yojana, Rajiv Awas Yojana, and Pradhan Mantri Awas Yojana (PMAY).
• Infrastructure-focused programmes like the Basic Services for the Urban Poor (BSUP), Atal Mission for Rejuvenation and Urban Transformation (AMRUT), and the Swachh Bharat Mission (SBM) have also played a key role in urbanisation. Metro rail projects alone have consumed nearly 30% of the Union budget.
• However, the centralised approach often imposes rigid administrative and financial structures, restricting local authorities from tailoring solutions to their specific challenges.

Centralised Financial Control and Its Impact

• The Centre’s financial dominance in urban planning is driven by the view that cities are economic growth engines and crucial for achieving India’s $5 trillion economy target. Infrastructure development is seen as a key enabler of growth, justifying central control over urban budgets.
• Successive Finance Commissions have also imposed conditions on fund transfers, such as linking property tax increases to state GDP growth. These restrictions limit the autonomy of state and local governments, preventing them from responding to their unique urban challenges effectively.

The Need for Localised Solutions

• Urbanisation patterns differ widely across states and regions, making a uniform approach ineffective. Migration trends vary, with northern states witnessing workforce outflows while southern states experience an influx of migrants.
• Kerala follows a rural-urban continuum where city boundaries blend with village panchayats, while Gujarat’s urbanisation is shaped by economic segregation, with the affluent moving to the peripheries. Given these variations, centrally planned schemes like PMAY and SBM may not always be relevant in every city.
• Some cities may have adequate housing but require better sanitation infrastructure, while others may prioritise mobility over waste management. A decentralised approach is essential to address these diverse urban needs.

A New Approach to Financial Devolution

• To enhance urban development, financial devolution must be restructured. Around 70% of the Union budget should be directly transferred to states, allowing state finance commissions to allocate funds to city governments based on local priorities.
• The remaining 30% can be reserved for national priorities such as climate-resilient infrastructure. This model would enable cities to invest in sectors like mobility, sanitation, housing, and water management based on their specific requirements rather than adhering to uniform national guidelines.

Avoiding the Pitfalls of Centralised Urban Missions

• The shortcomings of the Smart Cities Mission illustrate the risks of a top-down approach. Many cities struggled to utilise funds effectively, leading to poorly executed projects with little local relevance. In some cases, funds remained unspent due to bureaucratic delays, while in others, hastily implemented infrastructure projects failed to meet public needs.
• A more effective strategy would involve state and city governments working together with knowledge agencies to identify pressing urban challenges and allocate resources accordingly.

Strengthening Local Governance

• For sustainable urban development, governance must shift from centralised control to local empowerment. National governments should focus on macroeconomic policies and international commitments, while state and city governments should manage local development.
• Stronger city-level governance structures would ensure direct citizen engagement, efficient service delivery, and better resource management. A redefined urban mission framework, with clear roles for the Centre, States, and local governments, is essential to create cities that are not only liveable but also economically and environmentally sustainable.

2) DNA Polymorphisms and Their Role in Human Identification

GS 3: Science and Technology: Understanding DNA Polymorphism

Context

• DNA polymorphisms are variations in DNA sequences that help distinguish individuals. Just as Aadhaar uniquely identifies individuals for social security, DNA fingerprints serve as biological identifiers.
• DNA analysis, using techniques like Polymerase Chain Reaction (PCR), capillary electrophoresis, and fingerprinting, plays a crucial role in forensic investigations, disaster victim identification, and paternity testing.

Understanding DNA Structure

• Every human cell—whether in skin, blood, teeth, or bone—contains 46 DNA molecules, with 23 inherited from each parent. Sperm and egg cells, however, carry only one copy of the genome.
• DNA is tightly packed in chromosomes, and each chromosome contains distinct genetic information. For instance, chromosome 3 holds about 6.5% of total DNA. While DNA from both parents is largely similar, variations called polymorphisms help trace ancestry and establish individual identity.

Short Tandem Repeats (STRs) and Their Significance

• DNA consists of two anti-parallel, complementary strands made up of four chemical bases: adenine (A), cytosine (C), guanine (G), and thymine (T). When cells divide, they replicate DNA using a complementary base-pairing mechanism. Occasionally, errors occur, leading to mutations.
• One crucial type of polymorphism used in DNA profiling is the Short Tandem Repeat (STR), where a short sequence of base pairs is repeated multiple times. Different individuals have varying numbers of STR repeats, making them useful in DNA fingerprinting.
• To analyze STRs effectively, scientists amplify specific DNA segments using the Polymerase Chain Reaction (PCR). This technique enables millions of copies to be created from even a minuscule DNA sample.
• The process involves heating DNA to 95°C to separate strands, introducing primers that bind to specific regions at 60°C, and using DNA polymerase to synthesize new strands at 72°C. The thermocycler device automates this process, allowing rapid DNA amplification.

Creating a DNA Fingerprint

• Once sufficient copies of DNA are produced, capillary electrophoresis is used to separate them based on size. Smaller DNA fragments move faster through the capillary tube under an electric field.
• By analyzing multiple STRs simultaneously, scientists generate a unique DNA fingerprint. This fingerprint, except in identical twins, is distinct for every individual and can be extracted from teeth, bones, blood, spit, and even traces left on cloth or soil.

Applications of DNA Fingerprinting

• DNA fingerprints play a vital role in forensic science. They help establish parent-child relationships, identify individuals from disaster remains, and solve crimes by analyzing blood, sweat, or saliva left at crime scenes. They are also used in organ donor matching and wrongful conviction exonerations.
• DNA is remarkably stable, with scientists successfully extracting intact DNA from 65,000-year-old human remains. Many cold cases have been solved by re-analyzing archived crime scene DNA, highlighting the enduring significance of DNA fingerprinting in modern science.

3) Genome Sequencing of 10,000 TB Samples Completed

GS 3: Science and Technology: Elimination TB

Why is it in the news?

• The Department of Biotechnology (DBT), under the Ministry of Science and Technology, has completed sequencing 10,000 Mycobacterium tuberculosis samples, constituting a third of its target of 32,500 samples.
• This initiative aims to enhance the understanding of drug-resistant TB and identify unique genomic traits of the bacterium in India. Preliminary findings indicate that 7% of the sequenced samples exhibit resistance to a single drug.

Dare2eraD TB: A Genomic Initiative

• The sequencing effort is part of the Dare2eraD TB program, launched in 2022, under which nine laboratories from DBT, the Council of Scientific and Industrial Research (CSIR), and the Indian Council of Medical Research (ICMR) are collaborating under the Indian Tuberculosis Genomic Surveillance consortium.
• The project aligns with India’s broader mission to eliminate TB, with full genome sequencing expected to be completed by October 2025.

India’s TB Elimination Goal

• In 2018, PM Narendra Modi set a goal to eliminate TB by 2025—five years ahead of the World Health Organization’s (WHO) global target of 2030.
• WHO defines elimination as reducing TB cases to one per million people, whereas India currently has 1,990 cases per million, down from 2,370 per million in 2015. India accounts for 28% of new TB cases worldwide, with an additional undiagnosed latent TB population estimated at up to 3,000 per million.
• A major concern in tackling TB is drug resistance. Among the 10,000 sequenced samples, 7% showed resistance to a single drug. Scientists at the National Institute of Immunology (NII) highlighted the potential of AI-driven diagnostic tools to reduce TB confirmation time from three weeks to one week.
• The dataset reveals that most TB patients belong to the 18-45 age group, with a significant number suffering from diabetes and underweight conditions. These insights are critical in shaping targeted interventions for TB elimination in India.

4) Glaciers Losing Ice at Record Levels: UN Report

GS 3: Environment and Biodiversity: Concern over melting of Glaciers

Context

• Glaciers worldwide are melting at an unprecedented rate, with the last three years witnessing the largest recorded ice loss, according to a UNESCO report released on March 21.
• Since 1975, glaciers have lost 9 trillion tonnes of ice, equivalent to an ice block the size of Germany, 25 meters thick, according to the director of the World Glacier Monitoring Service.

More about the news

• Glaciers lost 450 billion tonnes of ice in 2024 alone, with five of the last six years recording the highest losses. This rapid decline is a major contributor to rising sea levels, increasing the risk of floods, disrupting hydroelectric energy, and threatening water supplies.
• Approximately 275,000 glaciers remain globally, comprising 70% of the world’s freshwater alongside the Antarctic and Greenland ice sheets, according to experts of the World Meteorological Organization.
• About 1.1 billion people living in mountain regions face worsening droughts, avalanches, landslides, and glacial lake outburst floods (GLOFs) as temperatures rise. In East Africa, glaciers in the Rwenzori Mountains are expected to vanish by 2030, impacting indigenous communities.
• Globally, glacier melt has contributed 18 mm to sea level rise between 2000 and 2023, exposing up to 300,000 people per millimetre to annual flooding.
• Further, glacier loss is accelerating faster than anticipated, urging global action to mitigate climate change and protect these vital water sources.

5) World Tuberculosis (TB) Day 2025: Towards a TB-Free India

GS 3: Science and Technology: Combating TB

Context

• World Tuberculosis (TB) Day is observed annually on March 24 to raise awareness about TB, one of the deadliest infectious diseases. The day commemorates Dr. Robert Koch’s discovery of the TB-causing bacterium in 1882. India has been observing this day since 1982, aligning with global efforts to combat TB.
• Despite significant progress, TB remains a major public health challenge, causing severe health, social, and economic consequences. The 2025 theme, “Yes! We Can End TB: Commit, Invest, Deliver,” underscores the need for stronger commitments, especially against drug-resistant TB.

India’s Ambitious TB Elimination Goal

• India aims to eliminate TB by 2025, five years ahead of the World Health Organization’s (WHO) 2030 target. The National Tuberculosis Elimination Programme (NTEP) has strengthened TB control through advanced diagnostics, innovative policies, private-sector partnerships, and a patient-first approach.
• Key drivers of this initiative include enhanced case reporting, improved diagnostics, financial support for patients, and multi-sectoral collaboration. However, with global TB funding declining and shifting healthcare priorities, sustained commitment is crucial to achieving India’s goal.

Despite worldwide efforts, TB remains a significant public health issue, with India carrying the highest TB burden globally. Understanding both global and national TB statistics is essential to gauge the scale of the disease and the urgency required for its elimination.

National Tuberculosis Elimination Programme (NTEP)

• Originally known as the Revised National Tuberculosis Control Program (RNTCP), NTEP was renamed in 2020 to emphasize India’s commitment to eliminating TB.
• It follows the National Strategic Plan (2017-2025) based on the Detect-Treat-Prevent-Build (DTPB) approach. This structured framework enhances diagnosis, treatment, and prevention, expediting India’s journey towards TB elimination.

Achievements of NTEP

• According to WHO’s Global TB Report, India has made notable strides in TB control. The incidence rate of TB has dropped from 237 cases per 1 lakh people in 2015 to 195 in 2023, marking a 17.7% decline. TB-related deaths have also decreased from 28 to 22 per 1 lakh people during the same period. Another major milestone is the reduction in missing TB cases from 15 lakh in 2015 to 2.5 lakh in 2023, an 83% decline.
• To combat drug-resistant TB, India has introduced all-oral Bedaquiline regimens, increasing treatment success rates from 68% in 2020 to 75% in 2022. The mBPaL regimen (Bedaquiline, Pretomanid, Linezolid) has further improved multi-drug-resistant TB (MDR-TB) outcomes to 80%, reducing treatment duration to six months.

Pradhan Mantri TB Mukt Bharat Abhiyan (PMTBMBA)

• A crucial component of NTEP, PMTBMBA aims to mobilize communities, businesses, and institutions to support TB patients. This initiative provides nutritional, diagnostic, and vocational support to enhance treatment outcomes and reduce mortality.
• It is recognized as the world’s largest crowd-sourcing initiative for TB nutritional support.

Key goals include:

• Providing enhanced care and support for TB patients.
• Encouraging active community involvement.
• Leveraging CSR contributions from businesses and institutions.

Ni-kshay Poshan Yojana (NPY)

• Launched in 2018, Ni-kshay Poshan Yojana (NPY) incentivizes private healthcare providers to report TB cases, improving TB surveillance and treatment coverage. Under NPY, financial aid for nutrition has doubled from ₹500 to ₹1,000 per month, ensuring each patient receives ₹3,000 to ₹6,000 during treatment.
• Additionally, Energy Dense Nutritional Supplementation (EDNS) is provided to underweight TB patients (BMI <18.5) for the first two months, benefiting 12 lakh patients and improving recovery rates.

Ni-kshay Mitra Initiative

• The Ni-kshay Mitra Initiative, under PMTBMBA, encourages individuals, NGOs, corporates, and faith-based organizations to support TB patients for at least six months. They offer nutritional, social, or economic assistance.
• Recently, its scope was expanded to provide food baskets for household contacts of TB patients, reducing infection risk and easing financial burdens.
• To strengthen these efforts, ₹3,202 crores have been disbursed to 1.13 crore beneficiaries through Direct Benefit Transfer (DBT) under NPY.
• An additional ₹1,040 crores have been allocated, shared 60:40 between the Centre and States, ensuring sustained support and reduced TB mortality.

Ni-kshay Portal: Strengthening Surveillance

• The Ni-kshay Portal, developed by the Central TB Division, MoHFW, in collaboration with NIC and WHO India, serves as India’s National TB Surveillance System. It enables healthcare workers to register TB cases, order tests, track treatment, and monitor adherence.
• Currently, over 1.51 crore TB patients are undergoing treatment, with 1.18 crore receiving support through Ni-kshay Mitras. The initiative reinforces public participation in TB elimination, resonating with PM Narendra Modi’s call for collective humanitarian action.

Conclusion

• India is making steady progress towards TB elimination by 2025, driven by NTEP’s structured initiatives. Programs like PMTBMBA, NPY, and Ni-kshay Mitra enhance community participation, nutritional support, and treatment adherence. The Ni-kshay Portal further streamlines patient surveillance and management.
• However, to sustain this momentum, increased investments, innovation, and multi-sectoral partnerships are essential. With continued commitment, India is poised to become a global leader in TB eradication.

6) Yoga Meets Heritage: Meghalaya’s Living Root Bridge Hosts Unique Session

GS 1: Culture and History: Promoting Yoga

About the news

• The North Eastern Institute of Ayurveda and Homoeopathy (NEIAH) organized a special yoga session at Meghalaya’s iconic Double Decker Living Root Bridge as part of the countdown to International Day of Yoga (IDY) 2025.
• Set against lush rainforests and flowing streams, the event blended ancient wisdom with modern wellness, symbolizing resilience and harmony.
• The Living Root Bridge, a UNESCO World Heritage contender, served as the perfect venue, showcasing yoga’s deep connection with nature.

• India has redefined yoga’s global presence by hosting sessions at historic landmarks, and this event further highlighted the country’s cultural and ecological richness. With IDY 2025 approaching, such initiatives continue to promote yoga’s benefits while celebrating India’s natural and heritage sites.

7) GI-Tagged Dalle Chilly from Sikkim Expands Global Reach

GS 3: Economy: Promoting agri-exports

Why is it in the news?

• India has achieved another milestone in agricultural exports as the Agricultural and Processed Food Products Export Development Authority (APEDA), under the Ministry of Commerce & Industry, successfully facilitated the first consignment of GI-Tagged Dalle Chilly from Sikkim to the Solomon Islands.
• This achievement highlights India’s growing presence in the global organic agricultural market and the rising international demand for premium products from the North Eastern region.

Dalle Chilly: A Unique Spice from Sikkim

• Dalle Chilly, also known as Fire Ball Chilly or Dalle Khursani, is renowned for its extreme pungency, bright red colour, and high nutritional value.
• Rich in vitamins A, C, and E, along with potassium, it has a Scoville Heat Unit (SHU) rating ranging from 100,000 to 350,000, making it a highly sought-after spice for both culinary and medicinal applications. Its distinct flavour and health benefits have strengthened its appeal in global markets.

Government Support and GI Tagging

• Recognizing the economic potential of the North East, PM Narendra Modi has emphasized its crucial role in India’s vision for a healthier and more sustainable future. He highlighted that Geographical Indication (GI) tagging is not just a certification but a transformative opportunity for farmers and artisans, enabling access to new markets and boosting economic prosperity.
• In 2020, the Department for Promotion of Industry and Internal Trade (DPIIT) granted the GI tag to Dalle Chilly, further enhancing its identity and marketability on the international stage.

Promoting Organic Farming in the North East

• To support sustainable agricultural practices, the Government of India has been actively promoting organic farming in the North East under the Mission Organic Value Chain Development for North Eastern Region (MOVCD-NER).
• Spearheaded by the Department of Agriculture and Farmers’ Welfare, this initiative has significantly improved the production and quality of organic Dalle Chilly, making it more attractive for global trade.
• With increasing demand and government-backed initiatives, Sikkim is poised to become a key player in the international spice industry.

8) National Mission for Manuscripts: Preserving India’s Textual Heritage

GS 1: Culture and History: Preserving and promoting manuscript heritage

Why is it in the news?

• The Government of India is committed to preserving and promoting the country’s vast manuscript heritage through large-scale digitization and increased public accessibility.
• The National Mission for Manuscripts (NMM) has been restructured as the ‘Gyan Bharatam Mission’, a Central Sector Scheme (2024-31) with an allocation of ₹482.85 crores. The mission focuses on documenting, conserving, and disseminating India’s rich textual traditions.

Key Objectives of Gyan Bharatam Mission

Survey and Documentation

• A nationwide survey and registration of manuscripts are being conducted to maintain a comprehensive record of India’s manuscript wealth. This initiative will help in identifying and cataloguing rare and significant manuscripts across the country.

Conservation and Preservation

• Scientific methods are being employed for the conservation and preventive preservation of manuscripts housed in various repositories across India. These efforts ensure the longevity of fragile and rare manuscripts.

Digitization and Online Access

• The mission aims for large-scale digitization of manuscripts to establish a National Digital Manuscripts Library. Currently, around 3.5 lakh manuscripts covering 3.5 crore folios have been digitized. Of these, over 1,35,000 manuscripts have been uploaded on the web portal namami.gov.in, with 76,000 manuscripts available for free public access.
• The focus for the next five years will be on digitizing rare and fragile manuscripts for long-term preservation.

Publication and Research

• The initiative includes the editing, translating, and publishing of rare and unpublished manuscripts to encourage scholarly research. This will facilitate academic engagement and knowledge dissemination.

Capacity Building and Training

• To ensure expertise in manuscript conservation, the mission organizes training programs in manuscriptology, paleography, and conservation. These workshops help scholars, archivists, and conservators acquire specialized skills.

Public Awareness and Outreach

• Exhibitions, seminars, and cultural programs are being conducted to increase public awareness about India’s manuscript heritage. The mission also promotes engagement through manuscript festivals, research programs, and interactive workshops.

Regional Efforts: Uttar Pradesh’s Contribution

The National Mission for Manuscripts has played a pivotal role in Uttar Pradesh, with notable contributions from the Sampurnanand Sanskrit University, Varanasi, which has been a key partner in manuscript research and conservation.

• Manuscript Resource Centres (MRCs) and Manuscript Conservation Centres (MCCs) have been established in reputed institutions across the state.
• Over 5.2 million manuscripts have been documented nationwide, including a significant number from Uttar Pradesh.
• Various capacity-building programs have been conducted in the state to train scholars in manuscript conservation and transcription.
• Special projects have focused on preserving rare Sanskrit, Persian, and Arabic manuscripts in libraries across Uttar Pradesh.

Expansion and Future Plans

Under the Gyan Bharatam Mission, the Government aims to expand digitization and accessibility efforts further. The upcoming initiatives include:

• Collaboration with academic institutions, private collectors, and research organizations to increase digitization and dissemination of manuscripts.
• Partnerships with universities to enhance research on ancient texts and manuscripts.
• Organizing exhibitions, manuscript festivals, and workshops to engage the public and scholars.
• Training a new generation of manuscriptologists to continue preservation and research efforts.

Conclusion

• The Government remains dedicated to ensuring that India’s invaluable manuscript heritage is not only preserved but also made widely accessible for academic, cultural, and historical research.
• Through structured digitization and collaborative efforts, the Gyan Bharatam Mission seeks to safeguard and celebrate India’s rich textual legacy.

9) Indian Navy’s Maiden Maritime Initiatives: IOS Sagar and AIKEYME

GS 3: Defence: Strengthening maritime agencies

Context

• The Indian Navy has significantly strengthened its partnerships with maritime agencies across the Indian Ocean Region (IOR) over the past decade. Aligned with the Government of India’s vision of Security and Growth for All in the Region (SAGAR), these efforts include joint naval exercises, coordinated patrols, information sharing, Humanitarian Assistance and Disaster Relief (HADR), and capacity building.
• As SAGAR enters its second decade, the Indian Navy has launched two major initiatives—Indian Ocean Ship (IOS) Sagar and Africa India Key Maritime Engagement (AIKEYME). These initiatives aim to solidify India’s role as the ‘Preferred Security Partner’ and ‘First Responder’ in the IOR, further strengthening regional maritime security.

Indian Ocean Ship (IOS) Sagar

• IOS Sagar is a new initiative that fosters sustained cooperation with IOR nations. As part of this mission, INS Sunayna will be deployed to the Southwest IOR with a multinational crew from nine Friendly Foreign Countries (FFCs)—Comoros, Kenya, Madagascar, Maldives, Mauritius, Mozambique, Seychelles, Sri Lanka, and South Africa.
• This deployment, scheduled for April 2025, will last over a month and include port calls at Dar-es-Salaam (Tanzania), Nacala (Mozambique), Port Louis (Mauritius), Port Victoria (Seychelles), and Male (Maldives).
• Additionally, the ship will conduct Joint Surveillance of Exclusive Economic Zones (EEZs) of Tanzania, Mozambique, Mauritius, and Seychelles.
• The mission also includes a two-week training program for FFC personnel at naval professional schools in Kochi, India, covering both classroom learning and practical sea-based training.
• These personnel will be actively involved in ship operations, including watch-keeping, technical drills, and branch-specific activities. Furthermore, IOS Sagar participants will have the opportunity to observe the harbour phase activities of Exercise AIKEYME in Dar-es-Salaam, Tanzania.

Africa India Key Maritime Engagement (AIKEYME)

• India and Africa share a deep commitment to maritime security, with a focus on combating piracy, illegal trafficking, and unregulated fishing through enhanced cooperation, information sharing, and surveillance.
• In line with this, the Indian Navy, in collaboration with the Tanzania People’s Defence Force (TPDF), is launching a large-scale multilateral maritime exercise titled ‘Africa India Key Maritime Engagement’ (AIKEYME), meaning ‘Unity’ in Sanskrit.
• The maiden edition of AIKEYME is set to take place at Dar-es-Salaam, Tanzania, in mid-April 2025, with Defence Minister Rajnath Singh inaugurating the event. The six-day exercise will witness participation from Comoros, Djibouti, Eritrea, Kenya, Madagascar, Mauritius, Mozambique, Seychelles, and South Africa, alongside the co-hosts, India and Tanzania.

The exercise will be conducted in two phases:

• Harbour Phase: This phase will focus on Tabletop and Command Post exercises on piracy and information sharing, along with specialized training on Seamanship and Visit Board Search and Seizure (VBSS).
• Sea Phase: Activities will include Seamanship evolutions, Search and Rescue (SAR) operations, VBSS drills, small arms firing, and helicopter operations to enhance interoperability among participating navies.

Conclusion

• Through IOS Sagar and AIKEYME, the Indian Navy aims to build stronger maritime ties, enhance regional security cooperation, and improve operational interoperability with IOR and African nations.
• These initiatives reaffirm India’s commitment to a safe, stable, and rules-based maritime order in the Indian Ocean Region.

10) Advancing Cashless India: Incentive Scheme for Low-Value BHIM-UPI Transactions

GS 3: Economy: Making Cashless payments accessible

Why is it in the news?

• The Union Cabinet, chaired by PM Narendra Modi, has approved the ‘Incentive Scheme for Promotion of Low-Value BHIM-UPI Transactions (Person to Merchant – P2M)’ for the financial year 2024-25.
• This initiative aims to enhance digital transactions, encourage small merchants to adopt UPI, and promote financial inclusion by making cashless payments more accessible and efficient.

Strengthening India’s Digital Payment Ecosystem

• The promotion of digital payments is a key aspect of the Government’s financial inclusion strategy, ensuring secure and convenient transactions for all. Digital payment service providers incur costs to facilitate transactions, which are traditionally recovered through the Merchant Discount Rate (MDR)—a fee charged to merchants on card and digital transactions.
• As per the Reserve Bank of India (RBI), MDR for debit card transactions is up to 0.90%, while the National Payments Corporation of India (NPCI) caps MDR for UPI P2M transactions at 0.30%.
• However, to encourage digital transactions, since January 2020, MDR has been made zero for RuPay Debit Card and BHIM-UPI transactions through amendments to relevant financial legislations.

Financial Support for Payment Ecosystem Participants

• To sustain digital transaction services, the Government has implemented the ‘Incentive Scheme for Promotion of RuPay Debit Cards and Low-Value BHIM-UPI Transactions’.
• sThe incentives are paid to the Acquiring Bank (merchant’s bank) and shared among stakeholders, including the Issuer Bank (customer’s bank), Payment Service Provider Bank (facilitating UPI onboarding), and Third-Party App Providers (TPAPs).
• Over the past three financial years, the Government has provided financial support to maintain seamless digital payment operations.

Scheme Overview and Implementation

• The Incentive Scheme for Low-Value BHIM-UPI Transactions (P2M) will be implemented with an outlay of Rs. 1,500 crores from April 1, 2024, to March 31, 2025. The scheme exclusively targets UPI transactions up to Rs. 2,000, focusing on small merchants to drive digital payment adoption at the grassroots level.
• UPI transactions have seen remarkable growth, with total transaction value increasing from Rs. 21.3 lakh crore in FY2019-20 to Rs. 213.8 lakh crore by January 2025. Of this, P2M transactions have surged to Rs. 59.3 lakh crore, underscoring the rising acceptance of digital payments among merchants.

Objectives of the Scheme

• Boost BHIM-UPI Usage: Targeting Rs. 20,000 crores in transaction volume during FY 2024-25.
• Strengthen Digital Infrastructure: Enhancing secure and efficient payment systems.
• Improve Reliability: Ensuring high system uptime and reducing transaction failures.
• Expand Rural Penetration: Increasing UPI adoption in Tier 3 to 6 cities and remote areas through UPI 123PAY (for feature phones) and UPI Lite and UPI LiteX (for offline payments).

Incentive Structure and Merchant Benefits

• For small merchants, transactions up to Rs. 2,000 will have zero MDR and qualify for an incentive of 0.15% of the transaction value.
• For transactions above Rs. 2,000, no MDR will be charged, but no incentives will be provided. Large merchants will have zero MDR on all transactions but will not receive incentives.

Reimbursement Mechanism for Banks

The incentive disbursement follows a structured reimbursement mechanism:

1) 80% of the claim amount by acquiring banks is disbursed unconditionally each quarter.

2) The remaining 20% is released based on performance benchmarks:

• 10% payout if the bank maintains a technical decline rate below 0.75%.
• 10% payout if the bank ensures system uptime above 99.5%.

Key Benefits of the Scheme

• Convenience & Speed: Faster, safer transactions improve cash flow and provide digital credit access.
• Zero Extra Charges: Customers pay digitally without additional fees.
• Support for Small Merchants: Encourages cost-sensitive businesses to accept digital payments.
• Promoting a Less-Cash Economy: Ensures formal, accountable digital transactions.
• Enhanced System Efficiency: High uptime and low failure rates ensure reliable 24×7 payment services.
• Balanced Financial Approach: Facilitates digital growth while managing government expenditure effectively.

UPI’s Global Expansion

• India’s digital payment ecosystem is gaining international recognition, with UPI and RuPay expanding to seven countries: UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, and Mauritius.
• France marks UPI’s entry into Europe, offering seamless transactions for Indian travellers. Additionally, UPI’s presence is expanding within BRICS nations, strengthening global remittances and financial inclusion.
• According to the ACI Worldwide Report 2024, India accounted for 49% of all global real-time transactions in 2023, reinforcing its leadership in digital payments.

Conclusion

• The approved incentive scheme for FY 2024-25 is a transformative step in India’s digital journey. By promoting BHIM-UPI among small merchants, it fortifies the country’s financial infrastructure and advances financial inclusion.
• With UPI leading globally, India continues to set benchmarks in innovation, security, and accessibility. This initiative ensures that businesses, particularly at the grassroots level, benefit from seamless, cost-effective, and secure cashless transactions, strengthening the vision of a Digital India.